SBA 504 Standard Loan Requirements

Occupancy Requirements

New Construction:

Existing Buildings:

Collateral Assignment of Life Insurance

Guarantees

Personal Guarantees:

Corporate Guarantees:

Appraisal

Prior to closing, a certified appraisal of the project property shall be furnished to SBA. Total financing must not exceed 90 percent (exceptions up to 95% when including eligible soft costs) loan to value, based on the lesser of appraised value or total project cost. If the appraised value is less than the total project cost, the Borrower has the following options: 1) provide additional investment; 2) provide additional collateral; and/or 3) reduce the size of the project, as appropriate. TCM and SBA must be named as an intended user on the appraisal report; reliance letters issued after the original report are not accepted by SBA. For new construction or substantial renovation projects, SBA requires a post-construction statement and certification from the appraiser that all construction was performed according to plans and specifications.

Environmental

Prior to closing, TCM must obtain the reports or findings from any environmental assessment performed on the property. SBA and TCM must be satisfied that all real estate to be taken as collateral is reasonably free from recognized environmental conditions. For reports other than the SBA environmental questionnaire and RSRA,  SBA requires that an environmental professional sign the SBA Reliance Letter for each environmental report completed for the project.

Other Conditions

Borrower must comply with any other conditions, not inconsistent with the provisions of the Authorization For Debenture Guarantee, as reasonably may be required by TCM. This list of standard SBA 504 requirements is a partial overview of the loan requirements and therefore does not cover all requirements that may be contained in an actual SBA Authorization For Debenture Guarantee.